This is turning into an all out panic in crude oil. As I write, WTI is trading at 66.30, down $10 on the week. Brent crude is nearing $70/barrel. There is all out liquidation among longs right here in front of the weekend. It is a Black Friday for crude oil longs.
I was tempted to do a dip buy today but I held off because I was already underwater in my short bond position. I will hold the short bond position, and perhaps look to buy crude oil on a further selloff early next week. But I have a feeling we will have a gap up after the all out dump that just took place at the pit close in the NYMEX crude oil futures. Despite that, I am not willing to take a long position here just because of the potential for even more liquidation come Monday if we break $70 for good on Brent crude oil.
We may get a tradeable bounce in crude oil near these levels but I would only look for a $3-4 bounce. There is too much overhead now above $70 for it to breakthrough meaningfully.
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